The U.S. Securities and Exchange Commission (SEC) announced on Thursday that cryptocurrency trading platform Bittrex Inc., its co-founder and former CEO William Shihara, and Bittrex's foreign entity Bittrex Global GmbH have reached a settlement with the regulator. The SEC had filed charges against Bittrex entities and Shihara in April. Under the settlement, Bittrex and Bittrex Global agreed to pay a total of $24 million on a joint and several basis, comprising $14.4 million in disgorgement, $4 million in prejudgment interest, and $5.6 million in civil penalties.
Settlement Details and SEC Allegations
Specifically, the SEC stated that Bittrex and Shihara agreed to settle charges that they operated an unregistered national securities exchange, broker, and clearing agency. Meanwhile, Bittrex Global agreed to settle charges that it failed to register as a national securities exchange. Subject to court approval, the defendants consented to be permanently enjoined from violating securities laws.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, commented: “For years, Bittrex worked with token issuers to ‘scrub’ their online statements of any indicia that they were investment contracts — all in an effort to evade the federal securities laws. They failed.” This statement underscores the SEC’s aggressive stance against what it views as deliberate circumvention of regulations in the crypto industry.
SEC's Continued Crackdown on Crypto Firms
The SEC has taken several enforcement actions against major crypto firms this year, including Binance and Coinbase. Coinbase, which attempted to have the charges against it dismissed last week, claimed that the SEC “overstepped” its statutory authority. Reports indicate the regulator asked Coinbase to delist all crypto tokens except bitcoin to comply with securities laws. SEC Chairman Gary Gensler, who has faced criticism for his enforcement-centric regulatory approach, maintains that all crypto tokens except bitcoin are securities. He also described crypto as a highly speculative field rife with fraud.
Furthermore, the SEC has revealed plans to appeal the Ripple decision made by District Judge Analisa Torres regarding XRP, with Gensler stating that certain parts of the ruling were “wrongly decided.”